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Multifamily
The Regard at Medical Center
Houston, TX
INVESTMENT STRATEGY
INVESTMENT TYPE
Equity
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Offered By Frankforter Group
22.9%* TARGET IRR 21.9%-23.9%
5.5%* TARGET AVG CASH ON CASH
1.55X* TARGET EQUITY MULTIPLE
Estimated Hold Period 29 Months
Estimated First Distribution 5/2023
Minimum Investment 35000
*Please carefully review the Disclaimers section below, including regarding Sponsor’s assumptions and target returns
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Explore this project
Overview
The Regard is a Class A, 319-unit mid-rise apartment community built in 2013 and located 3 miles from the Texas Medical Center, the world's largest medical center.
Off-Market

Regard presents an attractive opportunity to obtain a well-maintained asset in a high-growth area at a basis well below replacement cost. Compared to similar new construction projects in the region, construction costs are nearing $300k+ a unit, representing a 40%+ premium over the Regard. Frankforter Group (“FG”) was able to get this deal off-market, giving us a tremendous discount from the competition. 

Asset Quality

Frankforter Group was able to get this deal off-market at a tremendous discount from the competition. This is especially true considering the property next door traded significantly higher than the Regard, while similar assets in the market are now trading at 22%+ premium

Capital Appreciation

The business plan provides bringing in best-in-class management and policies, which will be instrumental in turning this property around, as well as closing the loss-to-lease gap. Current market conditions are presently showing tremendous rental growth on this property when compared to the surrounding comps. There is a $491 loss-to-lease that the Sponsor plans to burn off over the investment period. 

Property at a glance
# of Units 319
Year Built 2013
Current Occupancy 93%
Exit Cap Rate 4.5%
Estimated Value at Exit $89,407,054
Acquisition Price

$63,000,000

Investment Highlights
Location - Texas Medical Center: A $4.25B Public-Private Partnership (PPP) Investment: The Texas Medical Center (“TMC”) is continuing its expansion with the TMC3 Campus, a $3.25B development project which is expected to serve as TMC’s medical research and commercialization cornerstone. This campus is in its First Phase of a long-term 15-year growth plan comprising five (5) primary partners: TMC, Baylor College of Medicine, Texas A&M University Health Science Center, University of Texas Health Science Center at Houston (UT Health), and the University of Texas M.D. Anderson Cancer Center. Spanning across 37-Acres, TMC3 will be a world-class, life science complex consisting of research centers, laboratories, healthcare institutions, a hotel, conference center, retail shops, and a park. Moreover, adjacent to the TMC, will be the site of the Levit-Green Development; a $1B, 53-acre life science innovation district, which will further fuel the positive job migration in this market. Collectively, the foregoing represents an aggregate $4.25B investment, which is expected to generate a significant amount of high-paying jobs in STEM related fields of employment.
Land Scarcity in Vicinity: The Regard is unique as it is poised to take advantage of the land scarcity affecting this particular MSA. Specifically, south of the Regard is a 300-acre parcel of land owned by the University of Texas, which is presently slated to house additional facilities for the university. Moreover, the remaining parcels of land in the Regard’s surroundings have been specifically zoned for healthcare and/or life science developments. Accordingly, the lack of land that can serve as a potential development site for our competitors, coupled with the TMC development in and of itself, will ensure consistent demand for high-quality residential communities, such as the Regard.
Off-Market Deal: Regard presents an attractive opportunity to obtain a well-maintained asset in a high-growth area at a basis well below replacement cost. Compared to similar new construction projects in the region, construction costs are nearing $300k+ a unit, representing a 40%+ premium over the Regard. Frankforter Group (“FG”) was able to get this deal off-market, giving us a tremendous discount from the competition.
Management
Cumulative Distributions

Frankforter Group

Frankforter Group is a third-generation real estate investment and asset management firm, with a primary focus on acquiring institutional-grade multifamily and commercial real estate across the United States and Canada, with a proven track record of realized returns for their investors.

Frankforter Group was founded in 2012, and since then the company owned and managed over 16,000 units with $2.8B AUM. Dividends to investors averaged 10% Cash Yield and when disposed they realized 2.3x Equity Multiple and 23% gross IRR since inception.

The Sponsor currently invests across the US in 12 states, focusing on the Sun Belt.

https://frankfortergroup.com/
  • Yaakov Frankforter
    Founder & CEO
Yaakov Frankforter
Founder & CEO

Yaakov is the Founder and Chief Executive Officer of Frankforter Group. Through years of mentorship by his late grandfather, Mr. David Rosenberg, Chairman of The Rosdev Group, Yaakov began to venture into partnerships by investing and developing real estate across North America. As an active real estate investor, owner, and operator since 2011, Yaakov has been directly involved in acquiring more than 12,000 multifamily units and has invested across the real estate spectrum including residential, office, hospitality, retail, and industrial properties. Yaakov specializes in multifamily investments, where property performance can be enhanced through multiple operational and strategic capital improvements. His investments have shown a strong history of success in improving both the quality of life for the tenants and returns to investors. Yaakov is responsible for the integration of the firm’s assets, regional management, executive team, and relations with institutional partners, lenders, and investors. Our constant growth has been fueled by his great ability to negotiate, structure, and close even the most complex transactions efficiently.

Track Record

Frankforter Group Track Record

Property Type Location Asset Type: # of units: Purchase price: Purchase Date: Current Market Value
Value Add Atlanta, GA Multi-family 181 $10,300,000 Apr-18 $23,625,000
Value Add Tampa, FL Multi-family 288 $35,500,000 Aug-18 $72,500,000
Value Add Atlanta, GA Multi-family 204 $12,500,000 Apr. 2019 $25,500,000
Core Tampa, FL Multi-family 448 $58,500,000 Jul-19 $123,200,000
Value Add Atlanta, GA Multi-family 240 $22,875,000 Jan-21 $38,200,000
Value Add Atlanta, GA Multi-family 130 $6,695,000 May-21 $14,650,000
Value Add Atlanta, GA Multi-family 164 $13,448,000 Aug-21 $21,500,000
Core + Pompano Beach, FL Multi-family 144 $42,850,000 Jun-21 $62,760,000
Core + Orlando, FL Multi-family 248 $62,000,000 May-21 $92,480,000
Core + Orlando, FL Multi-family 409 $142,000,000 Dec. 2021 $182,000,000
Core + Atlanta, GA Multi-family 336 $126,900,000 Dec. 2021 $149,800,000
Core Houston, TX Multi-family 319 $63,000,000 Jun-22 $64,500,000
Value Add Atlanta, GA Multi-family 240 $38,700,000 Jul-22 $38,700,000
Total U.S Multifamily Portfolio:   Total Multifamily 3,351 $635,268,000   $909,415,000
Total Family Office Portfolio (Residential, Hospitality, Healthcare) Total Family Office 10,000 $1,015,500,709   $1,454,046,491
TOTAL PORTFOLIO     13,351 $1,650,768,709   $2,363,461,491
           
Disposed Assets - Multifamily
      Total # of units: Total Purchase price:   Total Sale Price:
      2,566 $259,568,677   $495,295,000

(1) Track record includes Total Portfolio & Disposed multi-family assets to total $2.8B

The above biography and track record were provided by the Sponsor and have not been independently verified by RM Technologies, LLC or its affiliates. Past performance is not indicative of future results. Please carefully review the Disclaimers section below.

Business Plan

Frankforter Group purchased The Regard at a tremendous discount to market pricing due to their relationship with the seller and the off-market nature of the transaction. The neighboring property recently traded for close to 22% higher while others are now trading in the $260k/unit range, compared to the Regard at $197k/unit range. The Sponsor also foresees far more market rental growth currently in the market and is projecting tremendous upside and growth to the submarket with the $4.25B in development and STEM job creations. 

There is also a shortage of supply in Houston by over 17k which will only foster further rental growth.

As part of the business plan for this asset, the Sponsor will be implementing light improvements to the Property in order to optimize resident satisfaction, reduce expenses and increase ancillary revenues. Moreover, the business plan provides bringing in best-in-class management and policies, which will be instrumental in turning the Property around, as well as closing the loss-to-lease gap. In particular, since 2016, about 4,000 residential units have been delivered to this market in anticipation of the PPP investment. However, over the last two years, a combination of temporary over-supply, together with the effects of the COVID-19 pandemic, have placed downward pressure on market rents. Nevertheless, current market conditions are presently showing tremendous rental growth on this property when compared to the surrounding comps, and the Sponsor is seeing a $491 loss-to-lease that they plan on burning off over the investment period. 

The CapEx budget is $1,943,321 which mainly consists of applying a new paint coating to the building exterior and corridors, common areas upgrading, including the gym, business center, leasing office, outdoor parks and the pool area, curb enhancement, and installing smart-home packages in each unit.

CURRENT OPERATIONS

Frankforter Group acquired the Property on June 30. Throughout the first quarter of ownership, they have achieved a significant rental increase, and it’s 93% leased for November 2022. The Property has started its light CapEx plan by making repairs and upgrading base building systems including maglocks on the doors (entry points to the property), removing dead trees and branches in the pool area, replacing the water pumps, replacing all exterior lights, and overall giving the Property a cleaner appeal. The Sponsor is also in the process of installing a new entry system for all entry points to the Property. The fire inspection was completed, and they are also in the process of repairing sprinklers, fire pumps, and fire alarms, and replacing all expired fire extinguishers for a total amount of ​$110,065.57 spent.

Since takeover, collections went up by removing the non-paying tenants. The average rent is currently $1,291 with the recent lease trade-outs showing an average of $1,385. This is just organic growth without factoring in the capital improvement projects. To date the Sponsor has already increased the average rents across the whole property above $50 since acquisition, with the majority of the lease expirations terminating in summer 2023, leaving tremendous upside to continue to burn off the loss-to-lease in line with the business plan.

The plan for Q4 2022 is to ​start upgrading the leasing office, resident lounge, business center, pool area, courtyards, fitness center, and model unit, which brings the total CapEx spent in the first 6-months ownership period to ​approximately $600,000. This number is based on doing 50% of the improvements over the next 3 months.
 
The Regard’s management company, Greystar, has been a valuable partner since Day 1. Changing the current staff and replacing them with 6 well-trained staff members brought a whole new culture that put the residents' experience at the core of this community.

Acquisition Costs $ Amount
Purchase Price $63,000,000
Cash Reserves $3,944,475
Closing Costs $6,773,856
Total Acquisition Costs $73,718,331
   
Capital Expenditures $ Amount
Interior Unit Renovations  $154,715
Electrical & HVAC $34,550
Fire Sprinkler/Fire Alarm $76,100
Exterior  Misc. Repairs $120,890
Painting $590,900
Security Cameras $85,000
Fencing, Paving, and Sidewalks $57,000
Landscaping/Irrigation/Tree Trim - Removal $147,500
Amenities $500,000
Contingency  $88,333
GC/Management Fee $88,333
Total Capital Expenditures $1,943,321
Grand Total $75,661,652

 

Property
Property Details

The Regard at Medical Center is a newer vintage, Class A apartment community that has been purchased below replacement cost in an off-market deal. The Property was underperforming due to mismanagement during the previous ownership. By implementing best-in-class strategies, the Frankforter Group plans to unlock its full potential and close the rent gap with neighboring communities. The Houston market and the Texas Medical Center pocket allow for tremendous rental growth and steady occupancy, attracting a high-skilled workforce with high-paying jobs.

Unit Type # of Units Avg SF/Unit Avg Rent (In-Place) Avg Rent (Post-Reno) Avg Rent Per SF (In-Place) Avg Rent Per SF (Post-Reno)
1BR-1BA 5 638 $1,158 $1,425 $1.81 $2.23
1BR-1BA 7 640 $1,072 $1,435 $1.67 $2.24
1BR-1BA 32 722 $1,134 $1,500 $1.57 $2.08
1BR-1BA 3 735 $1,017 $1,525 $1.38 $2.07
1BR-1BA 3 757 $972 $1,600 $1.28 $2.11
1BR-1BA 63 826 $1,172 $1,650 $1.42 $2.00
1BR-1BA 26 835 $1,188 $1,660 $1.42 $1.99
1BR-1BA 3 849 $1,417 $1,670 $1.67 $1.97
1BR-1BA 62 854 $1,192 $1,680 $1.40 $1.97
1BR-1BA 19 859 $1,231 $1,690 $1.43 $1.97
2BR-1BA 16 1,035 $1,388 $1,950 $1.34 $1.88
2BR-2BA 50 1,122 $1,472 $1,975 $1.31 $1.76
2BR-2BA 7 1,145 $1,478 $2,000 $1.29 $1.75
2BR-2BA 16 1,289 $1,526 $2,125 $1.18 $1.65
2BR-2BA 4 1,418 $1,549 $2,200 $1.09 $1.55
2BR-2BA 3 1,498 $1,653 $2,250 $1.10 $1.50
Total/Averages 319 916 SF $1,265 $1,744 $1.38/SF $1.90/SF
Comparables

Lease Comparables

Property Distance Unit Type Square Foot Market Rent Rent/Sf Year Built Stories Units
Regard at Med Center NA 1BR-1BA 722 $1,500 $2.08 2013 4 319
Regard at Med Center NA 1BR-1BA 826 $1,650 $2.00 2013 4 319
Regard at Med Center NA 1BR-1BA 854 $1,680 $1.97 2013 4 319
Mezzo Kirby Med Center 1.36 1BR-1BA 615 $1,688 $2.74 2016 5 378
Stadia Med Main 1 1BR-1BA 620 $1,560 $2.52 2020 4 338
Beacon at Buffalo Pointe 1 1BR-1BA 634 $1,315 $2.07 2017 4 279
Aspire at 610 0.1 1BR-1BA 636 $1,279 $2.01 2017 4 282
Orleans at Fannin Station 1.21 1BR-1BA 636 $1,515 $2.38 2019 4 338
Mezzo Kirby Med Center 1.36 1BR-1BA 655 $1,439 $2.20 2016 5 378
Mezzo Kirby Med Center 1.36 1BR-1BA 658 $1,477 $2.24 2016 5 378
Aspire at 610 0.1 1BR-1BA 677 $1,354 $2.00 2017 4 282
Beacon at Buffalo Pointe 1 1BR-1BA 681 $1,438 $2.11 2017 4 279
Orleans at Fannin Station 1.21 1BR-1BA 682 $1,459 $2.14 2019 4 338
Stadia Med Main 1 1BR-1BA 709 $1,582 $2.23 2020 4 338
Aspire at 610 0.1 1BR-1BA 721 $1,404 $1.95 2017 4 282
Mezzo Kirby Med Center 1.36 1BR-1BA 722 $1,538 $2.13 2016 5 378
Stadia Med Main 1 1BR-1BA 789 $1,793 $2.27 2020 4 338
Aspire at 610 0.1 1BR-1BA 805 $1,532 $1.90 2017 4 282
Mezzo Kirby Med Center 1.36 1BR-1BA 805 $1,542 $1.92 2016 5 378
Stadia Med Main 1 1BR-1BA 845 $1,827 $2.16 2020 4 338
Average 0.92 1BR-1BA 699 $1,514 $2.18 2018 4 330

 

Property Distance Unit Type Square Foot Market Rent Rent/Sf Year Built Stories Units
Regard at Med Center NA 2BR-1BA 1035 $1,950 $1.88 2013 4 319
Regard at Med Center NA 2BR-2BA 1122 $1,975 $1.76 2013 4 319
Regard at Med Center NA 2BR-2BA 1289 $2,125 $1.65 2013 4 319
Beacon at Buffalo Pointe 1 2BR-2BA 972 $1,978 $2.03 2017 4 279
Mezzo Kirby Med Center 1.36 2BR-2BA 1028 $2,164 $2.11 2016 5 378
Mezzo Kirby Med Center 1.36 2BR-2BA 1094 $2,229 $2.04 2016 5 378
Beacon at Buffalo Pointe 1 2BR-2BA 1105 $1,750 $1.58 2017 4 279
Aspire at 610 0.1 2BR-2BA 1108 $1,982 $1.79 2017 4 282
Mezzo Kirby Med Center 1.36 2BR-2BA 1184 $2,618 $2.21 2016 5 378
Orleans at Fannin Station 1.21 2BR-2BA 1190 $1,969 $1.65 2019 4 338
Orleans at Fannin Station 1.21 2BR-2BA 1207 $2,080 $1.72 2019 4 338
Stadia Med Main 1 2BR-2BA 1228 $2,365 $1.93 2020 4 338
Orleans at Fannin Station 1.21 2BR-2BA 1253 $2,160 $1.72 2019 4 338
Stadia Med Main 1 2BR-2BA 1264 $2,395 $1.89 2020 4 338
Stadia Med Main 1 2BR-2BA 1270 $2,465 $1.94 2020 4 338
Average 1.07 2BR-2BA 1159 $2,180 $1.89 2018 4 334

Sales Comparables

Property Units  Price Price per unit Year Built
Regard at Med Center 319 $63,000,000 $197,492 2013
Arrive Upper Kirby 199 $108,975,000 $547,613 2018
The Kirby 305 $94,500,000 $309,836 2015
The Millennium High Street 340 $101,000,000 $297,059 2013
Stadia Med Main 338 $79,800,000 $236,095 2020
Venue Museum District 224 $76,000,000 $339,286 2009
The Flats at West Alabama 304 $67,000,000 $220,395 2021
Bellrock Sawyer Yards 327 $86,200,000 $263,609 2020
Aspire at 610 282 $66,000,000 $234,043 2018
Average 290 $84,934,375 $305,992 2017
Location

Market Information

Heading into the second half of 2022, investment activity in Houston’s multifamily market is poised for another record year. Multifamily investment volume during the first half of 2022 totaled nearly $9 billion, according to CoStar estimates. That marks the highest total ever for the first half of a year.

For reference, investment volume totaled $18 billion during 2021, according to CoStar estimates. That's more than three times the yearly volume of $5 billion recorded between 2010 and 2019. Between 2019 and 2021, portfolio sales captured 16% of the total sales on average during the first half of each year. By comparison, they have made up about 20%, or more than 12,000 units, during the first half of 2022.

Source: CoStar

Submarket Information

The Texas Medical Center (“TMC”) is continuing its expansion with the TMC3 Campus, a $3.25B development project which is expected to serve as TMC’s medical research and commercialization cornerstone. Spanning across 37-Acres, TMC3 will be a world-class, life science complex consisting of research centers, laboratories, healthcare institutions, a hotel, a conference center, retail shops, and a park. Moreover, adjacent to the TMC, will be the site of the Levit-Green Development; a $1B, 53-acre life science innovation district, which will further fuel the positive job migration in this market. Collectively, the foregoing represents an aggregate $4.25B investment, which is expected to generate a significant amount of high-paying jobs in STEM-related fields of employment. 

Photos
Financials
Sources & Uses

Total Capitalization

Sources of Funds $ Amount $/Unit
Debt $51,800,000 $162,382
GP Investor Equity(1) $2,386,165 $7,480
LP Investor Equity $21,475,486 $67,321
Total Sources of Funds $75,661,651 $237,184
     
Uses of Funds $ Amount $/Unit
Purchase Price $63,000,000 $197,492
Acquisition Fee $787,500 $2,469
Loan Fees $1,036,000 $3,248
Closing Costs $4,457,689 $13,974
CapEx $1,943,321 $6,092
Working Capital $500,000 $1,567
Loan Reserve $1,547,142 $4,850
Rate Cap $2,390,000 $7,492
Total Uses of Funds $75,661,651 $237,184

(1) The Sponsor’s equity contribution may consist of friends and family equity and equity from funds controlled by the Sponsor.

Debt Assumptions

The in-place debt terms are as follows:

  • Lender: Arbor
  • Recourse or Non-Recourse: Non-recourse
  • Term: 3 Years + Two 1-Year Extensions
  • Loan to Cost: 68.5%
  • Estimated Proceeds: $51,800,000
  • Interest Type: Floating
  • Spread Above SOFR: 4.375%
  • Interest-Only Period: 3 Years
  • Amortization: 30 Years
  • Prepayment Terms: 1% exit fee
  • Extension Requirements: 0.25% fee
  • Rate Cap & Terms: Strike Rate: Year 1 = 0.50%; Year 2 = 1.00% (Sponsor has budgeted a year 3 rate cap extension fee reserve of $950,000 in closing costs.)

(1) A substantial portion of the total acquisition for the Property will be paid with borrowed funds, i.e., debt.  Please carefully review the Disclaimers section below for additional information concerning the Sponsors use of debt. 

Distributions

Frankforter Group intends to make distributions as follows:

  1. At least quarterly, distributions should be received by each Partner to a cumulative, preferred return of 8%.
  2. Second to all Partners pro-rata based on Partner's percentage interest until all capital is returned.
  3. Third, 70% of any remaining available will be distributed to the Partners, and the remaining 30% remaining available cash will be distributed to the General Partner.

Frankforter Group intends to make distributions to investors after the payment of the company's liabilities (loan payments, operating expenses, and other fees as more specifically set forth in the LLC agreements, in addition to any member loans or returns due on member loan).

Distributions are expected to start in May 2023 and are projected to continue on a quarterly basis thereafter. Distributions are at the discretion of Frankforter Group, who may decide to delay distributions for any reason, including maintenance or capital reserves.

Frankforter Group will receive a promoted/carried interest as indicated above.

Cash Flow Summary
    Year 1 Year 2 Year 3
Effective Gross Revenue     $5,561,806 $6,525,961 $7,059,970
Total Operating Expenses   $2,972,934 $3,259,039 $3,362,634
Net Operating Income     $2,588,872 $3,266,922 $3,697,336
             
Project-Level Cash Flows
      Year 0 Year 1 Year 2 Year 3
Net Cash Flow     ($23,861,651) $1,135,432 $923,501 $38,080,409
             
Investor-Level Cash Flows(1)
      Year 0 Year 1 Year 2 Year 3
Net Cash Flow     ($7,170,000) $341,177 $277,495 $10,491,376
             
Investor-Level Cash Flows - Hypothetical $50,000 Investment(1)
      Year 0 Year 1 Year 2 Year 3
Net Cash Flow     ($50,000) $2,379 $1,935 $73,162

(1) RM Technologies, LLC and its affiliates do not provide any assurance of returns.  Returns presented are net of all fees.  Please carefully review the Fees and Disclaimers sections below for additional information concerning Sponsor’s use or projected returns and fees paid to Sponsor and RM Technologies, LLC.

 

Fees

Certain fees and compensation will be paid over the life of the transaction; please refer to Frankforter Group's materials for details. The following fees and compensation will be paid(1)(2):

One-Time Fees:
Type of Fee Amount of Fee Received By Paid From
Acquisition Fee 1.25% of Purchase Price Frankforter Group Property
Construction Management Fee 5.0% of Completed Capital Projects Greystar Cash Flow
Technology Solution Licensing Fee(2) Flat one-time licensing fees of $15,000 plus $1,500 per each prospective investor onboarded by Sponsor through its license and use of RM Technologies’ Technology Solution RM Technologies, LLC

Capitalization (at Sponsor’s discretion)

       
Recurring Fees:
Type of Fee Amount of Fee Received By Paid From
Asset Management Fee 2.25% of Effective Gross Income Frankforter Group Cash Flow
Property Management Fee 2.5% of Effective Gross Income Greystar Cash Flow
Administration Solution Licensing Fee(2) Flat quarterly licensing fee of $125 per investor serviced by Sponsor through the license and use of  RM Technologies’ Administration Solution RM Technologies, LLC Cash Flow

(1) Fees may be deferred to reduce impact to investor distributions.

(2) Please see the Fees and Disclaimers sections below for additional information concerning fees paid to RM Technologies, LLC.

.

Disclaimers
Disclaimers

Sponsor’s Projects and Targets

*Assumptions and projections included in the information on this Page, including pro forma projections (collectively “Projections”) were provided by the Sponsor or an affiliate thereof and are not reflective of the position or opinions of, nor are they endorsed by, RM Technologies, LLC or its affiliates, or any other person or entity other than the Sponsor or its affiliates.  RM Technologies, LLC and its affiliates do not provide any assurance of returns or the accuracy or reasonableness of the Projections provided by the Sponsor or its affiliates.   There can be no assurance that the Sponsor’s methodology used for calculating any Projections, including Target IRR, Target Annualized Cash-on-Cash Return, and Target Equity Multiple (“Targets”), are appropriate or adequate.  The Sponsor’s Projections and Targets are hypothetical, are not based on actual investment results, and are presented solely for the purpose of providing insight into the Sponsor’s investment objectives, detailing its anticipated risk and reward characteristics and for establishing a benchmark for future evaluation of the Sponsor’s performance. The Sponsor’s Projections and Targets are not a predictor, projection or guarantee of future performance.  There can be no assurance that the Sponsor’s Projections or Targets will be met or that the Sponsor will be successful in meeting these Projections and Targets.  Projections and Target returns should not be used as a primary basis for an investor’s decision to invest.

No Approval, Opinion or Representation, or Warranty by RM Technologies, LLC or it Affiliates

The information on this Page, including the Sponsor’s offering documentation, which may include without limitation the Private Placement Memorandum, Operating or Limited Partnership Agreement, Subscription Agreement, the Project Summary and all exhibits and other documents attached thereto or referenced therein (collectively, the “Investment Documents”) was provided by the Sponsor or an affiliate thereof.  RM Technologies, LLC makes no representations or warranties as to the accuracy of such information and accepts no liability therefor.  No part of the information on this Page is intended to be binding on RM Technologies, LLC or its affiliates, or to supersede any of the Sponsor’s Investment Documents.  The opinions expressed on this page are solely the opinions of the Sponsor and its affiliates and none of the opinions expressed on this Page are the opinions of, nor are they endorsed by, RM Technologies, LLC or its affiliates.

Sponsor’s Information Qualified by Investment Documents

The Information on this Page, including of the principal terms of the Sponsor’s offering, is qualified in its entirety by reference to the more complete information about the offering contained in the Sponsor’s Investment Documents.  The information on this Page is not complete, and each prospective investor should carefully read all of the Investment Documents and any supplements thereto, copies of which are available by clicking the links above or upon request, before deciding whether to make an investment.  The information on this page should not be used as a primary basis for an investor’s decision to invest.  In the event of an inconsistency between the information on this Page and the Investment Documents, investors should rely on the information contained in the Investment Documents.  The information on this Page and the information in the Investment Documents are subject to last minute changes up to the closing date at the sole discretion of the Sponsor and its affiliates.

Risk of Investment

This real estate investment is speculative and involves substantial risk.  There can be no assurances that all or any of the assumptions will be true or that actual performance will bear any relation to the hypothetical illustrations herein, and no guarantee or representation is made that investment objectives of the Sponsor will be achieved.  In the event that actual performance is below the Sponsor’s Targets, your investment could be materially and adversely affected, and there can be no assurance that investors will not suffer significant losses.  A loss of part or all of the principal value of your investment may occur.  You should not invest unless you can readily bear the consequences of such loss.  Please see the Sponsor’s Investment Documents for additional information, including the Sponsor’s discussion concerning risk factors.

Risk of Forward-Looking Statements

Forward-looking statements are found here and in the applicable Investment Documents and may include words like “expects,” “intends,” “anticipates,” “estimates” and other similar words. These statements are intended to convey the Project Sponsor’s projections or expectations as of the date made. These statements are inherently subject to a variety of risks and uncertainties. Please see the applicable Investment Documents for disclosure relating to forward-looking statements.  All forward-looking statements attributable to the Sponsor or its affiliates apply only as of the date of the offering and are expressly qualified in their entirety by the cautionary statements included elsewhere in the Investment Documents.  Any financial projections are preliminary and subject to change; the Sponsor undertakes no obligation to update or revise these forward-looking statements to reflect events or circumstances that arise after the date made or to reflect the occurrence of unanticipated events.  Inevitably, some assumptions will not materialize, and unanticipated events and circumstances may affect the ultimate financial results. Projections are inherently subject to substantial and numerous uncertainties and to a wide variety of significant business, economic and competitive risks, and the assumptions underlying the projections may be inaccurate in any material respect. Therefore, the actual results achieved may vary significantly from the forecasts, and the variations may be material.

Sponsor’s use of Debt

A substantial portion of the total acquisition for the Property will be paid with borrowed funds, i.e., debt.  There can be no assurance that the Sponsor will secure debt on the rates and terms noted above, or at all.  All of the Sponsor’s estimated rates and terms of the debt financing are subject to lender approval, including but not limited to the annual interest rate and possible increases in capital reserve requirements for funds to be held in a lender-controlled capital reserve account. The use of borrowed money to acquire real estate is referred to as leveraging.  Leveraging increases the risk of loss.  If the Sponsor were unable to pay the payments on the borrowed funds (called a "default"), the lender might foreclose, and the Sponsor could lose its investment in its property.

In addition, unless the debt provides for a fixed rate of interest during the term of the loan and/or any subsequent extensions, the total amount of interest paid over the term of the debt will increase by the same amount as the related index. For example, if the index rate increases by 0.50% (50 basis points) the interest rate on the loan will increase by the same amount. The amount of such interest rate increases may be capped either by its terms or as the result of the Sponsor entering into an arrangement that caps the interest rate with respect to the debt at a particular rate.

Sponsor’s Offering is Not Registered

The interests offered by the Sponsor will not be registered under the Securities Act of 1933, as amended (the “Securities Act”) in reliance upon the exemptions from registration pursuant to Rule 506(c) of Regulation D as promulgated under the Securities Act (“Private Placement.”).  In addition, the interests will not be registered under any state securities laws in reliance on exemptions from registration.  Such interests are subject to restrictions on transferability and resale and may not be transferred or resold except as permitted under applicable state and federal securities laws pursuant to registration or an available exemption.  All Private Placements on the RealtyMogul Platform are intended solely for “Accredited Investors,” as that term is defined Rule 501(a) of the Securities Act.  Prospective investors must certify that they are Accredited Investors and provide either certain supporting documents or third party verification, and must acknowledge that they have received and read all investment materials.

RM Technologies, LLC Fees and Conflicts

RM Technologies, LLC, an affiliate of RealtyMogul, operates the RealtyMogul Platform.  RM Technologies, LLC charges a fixed, non-percentage-based licensing fee for real estate companies and their sponsors to license and use the RM Technologies LLC’s proprietary Platform, including one-time flat licensing fees for its Technology Solution and an ongoing quarterly flat licensing fees for its Administration Solution.  An estimate of the Technology Solution licensing fee is included in the Closing Costs above and is intended to be capitalized into the transaction at the discretion of the Sponsor.  The licensing fees received by RM Technologies, LLC are disclosed in the relevant operating agreement(s). Additionally, from time to time, employees of RM Technologies, LL C and its affiliates invest in Sponsor’s offering.  RM Technologies LLC’s receipt of licensing fees and its employee’s investments in Sponsor’s offering creates a conflict of interest between RealtyMogul and its affiliates, and investors or prospective investors.

No Investment Advice

RealtyMogul and RM Technologies, LLC are not a registered broker-dealer, investment adviser or crowdfunding portal.  Nothing on this Page should not be regarded as investment advice, either on behalf of a particular security or regarding an overall investment strategy, a recommendation, an offer to sell, or a solicitation of or an offer to buy any security.  Advice from a securities professional is strongly advised, and we recommend that you consult with a financial advisor, attorney, accountant, and any other professional that can help you to understand and assess the risks associated with any real estate investment.

For additional information on risks and disclosures visit https://www.realtymogul.com/investment-disclosure.

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